Monthly Archives: July 2011
One unacknowledged consequence of the Libya war? With the U.S. Navy occupied, Somali piracy is bigger business than ever. Stephen L. Carter on why Obama’s plan to cut the Pentagon’s budget may prove shortsighted.
by Stephen L. Carter | July 22, 2011 3:28 PM EDT
Is the Libyan war claiming casualties as far away as the Indian Ocean, the Arabian Sea, and the Gulf of Aden? That is the implication of this week’s report from the International Maritime Organization, which says attacks on shipping by Somali pirates in those waters hit a record in the first half of 2011. Requests to NATO for more ships to patrol sea lanes have been denied. Why? The Western navies are too busy in Libya.
Two years ago, amid a great burst of media attention, the U.S. and the EU committed ships and aircraft to battle the pirates. In April 2009, President Obama drew widespread and justified praise when he ordered a military operation that resulted in the rescue of a hostage sea captain and the killing of three Somali pirates with three bullets. The president promised to “halt the rise of piracy” in the region. French President Nicolas Sarkozy made a similar vow the previous year, after his nation’s special forces freed a pair of hostages.
Since then, the world’s attention has moved on. Although the piracy problem largely dropped off television screens, it is growing worse. Not only are the rates of attack rising, but so are the ransoms. Indeed, piracy is one of the world’s fastest-growing businesses. A recent report from the consulting firm Geopoliticity calculates that the average ransom for a hijacked ship, which ran about $150,000 as recently as 2005, now exceeds $5 million, meaning that pirates are earning well over $200 million a year. The income of a Somali pirate, says the report, can easily exceed 100 times what he could earn from legitimate work in his country.
The most powerful pirate group, known as the Somali Marines, is so sophisticated, says GlobalSecurity.org, that it “has a military structure, with a fleet admiral, admiral, vice admiral and a head of financial operations.” The gang carries out more than 80 percent of the hijackings in the region, and evidently pioneered the “mothership” attack model, using a large boat to get small, fast skiffs into deep water. (The Somali Marines who are pirates should not be confused with the Somali Marines who are soldiers—and who freely admit that they cannot defend the coastline against the pirates.)
The annual costs of piracy to world shipping, including damage and delay, are difficult to measure, but most experts agree that the figure is in the vicinity of $10 billion; some say more. The Geopolicity report estimates annual losses in the $13 billion to $15 billion range by 2014. And unless the pirates are defeated, the cost is likely to keep rising. The practice is so lucrative, and so weakly policed, that there is little incentive for the pirates to stop.
Despite all the promises, there is, at the moment, little the West can do. Its forces are overextended. A traditional and often overlooked function of the military is to keep the sea lanes open. In recent decades, this responsibility has fallen largely on the United States Navy, the dominant power in the world.
This is one reason that President Obama’s plan to save money by greatly reducing the size of the Pentagon’s budget may prove shortsighted. Defense spending should not be off-limits when the entire country is struggling. But the $400 billion in cuts announced so far, combined with an additional $400 billion to $500 billion that the administration is said to be seeking, is far too high. The dividend from ending the Iraq War and drawing down forces in Afghanistan cannot explain the entire reduction. Much of the money is going to come from procurement, already strained under the Bush administration, which in effect cashed in modernization programs to get war funding.
Cutting the Navy will have particularly far-reaching effects. It is the Navy that polices the sea lanes: for example, battling pirates. The naval surface fleet is built around the carrier strike group, consisting of an aircraft carrier and its escort ships. By maintaining a large number of these CSGs, as they are known, the United States is able to do what no other nation can: Project power, on short notice, anywhere in the world.
With the expected retirement of the USS Enterprise next year, however, the U.S. will have only 10 active-duty aircraft carriers, one less than the 11 mandated by federal law, and the smallest number since early in the Second World War. This is not entirely the fault of the administration: Congress has required that 11 carriers be maintained but has not provided the funds to support them.
In 2015, the first of the new Ford-class carriers is scheduled to enter service; the next is due in 2020. But these will likely replace, not augment, the carriers now in service. Moreover, because of maintenance and refitting requirements, the practical number of carriers deployable at any moment will be, most likely, six—an awfully small number to guard an awful lot of ocean. At the moment, only five American carriers are out of port. One of them, the Ronald Reagan, is reportedly in the Arabian Sea, but it is not there to battle pirates. It is supporting Operation Enduring Freedom—that is, the Afghan War.
Budgetary constraints have placed the Navy under increasing stress. According to Jane’s Defense Weekly, the Navy is cannibalizing its own ships in order to meet inspection requirements—that is, taking equipment from ship A (in active service) to bring ship B (also in active service) up to standard. Other reports say that as many as 20 percent of America’s naval vessels are failing combat-readiness inspections. Half of the Navy’s air fleet is in disrepair. One cause is said to be shrinking naval manpower: It is difficult to do the same amount of maintenance on a ship with a smaller crew.
Maybe Muammar Gaddafi will fall soon, and the West will have ships to spare to battle the Somali Marines and the other gangs. But we should bear in mind that what the pirates are doing is neither new nor unusual. All through history, wars have been fought for control of the sea lanes. The goal of America’s first naval war, against the Barbary States of northern Africa during the presidency of Thomas Jefferson, was precisely to protect shipping. Even if the Somali pirates are defeated, new maritime threats will arise.
Like it or not, for more than six decades the world has looked to the U.S. to keep the sea lanes open, a task, as Navy Secretary James Forrestal put it 1947, “more or less inherited from Britain” following World War II. Keeping the sea lanes open keeps world trade flowing. The job is indispensable, and nobody else can do it. In a perfect world, an international flotilla might patrol the seas, but the world is not perfect, and only the U.S. is in a position to take on the responsibility. It may even be, in a moral sense, our duty as the only superpower.
Thus a stark choice is upon us: We can spend what is necessary to defend the seas, or we can leave them undefended.
For complete report visit: Pew Research Center
Critics of President Obama never tire of blaming him for today’s high deficits. But if blame belongs with one president, it belongs with Obama’s predecessor, George W. Bush. The chart above, which the New York Times created based upon figures from the Center on Budget and Policy Priorities, illustrates this point very clearly. But it’s worth reviewing the history here, because while it’s familiar to most of us who follow politics it doesn’t seem to get a lot of attention in the political debate.
By the end of the 1990s, the federal budget was in surplus for the first time in decades. Partly that was a product of unusually strong economic growth, during the internet boom, which had swelled tax revenues. But partly that was a product of responsible budgeting, presided over by the most recent two presidents, George H.W. Bush and Bill Clinton. In order to reduce deficits, lawmakers and those two presidents had agreed both to raise taxes and to reduce spending.
In the 2000 campaign, Clinton’s would-be successor, Al Gore, campaigned on a promise to, in effect, put those surpluses aside for a rainy day. Bush would have none of it. The government had too much money, he said; the responsible thing was to give it all back to the taxpayers. In office, he did just that, presiding over massive tax cuts that gave, by far, the largest benefits to the very wealthy. Bush promised that the tax cuts would act like a “fiscal straightjacket,” preventing government from growing. But then he, and his allies, launched two major wars and enacted a drug benefit for Medicare, all without paying for them.
Today’s fiscal gap is largely a product of those decisions, as the graph above shows. It has very little to do with anything Obama did while in office. In fact, the contrast between the two administrations could not be more striking. Obama’s primary undertaking has been comprehensive health care reform. But he insisted that it pay for itself, through a combination of spending cuts and tax increases.
Of course, tomorrow’s deficit problem is a bit different from today’s. Looking decades into the future, it’s the rising cost of health care that seem likely to wreck federal finances. But health care reform addresses that too, by putting in places the policies and institutions necessary to curb spending on medical care.
BBC News 26 July 2011 Last updated at 16:11 GMT
26 July 2011 Last updated at 16:11 GMT
The wealth gap between American whites and minorities has grown wider during the recession, according to an analysis of US Census data.
It found the median wealth of white US households in 2009 was $113,149 (£69,000), compared with $6,325 for Hispanics and $5,677 for blacks.
This left whites with about 20 times the net worth of blacks and 18 times that of Hispanics.
Those ratios compared with 7:1 for both groups back in 1995.
Asians also lost their top ranking to whites in median household wealth, more than halving from $168,103 in 2005 to $78,066 in 2009.
The report suggests Asian households were clustered in places such as California that were hit hard by the property market meltdown.
The study, compiled by the Pew Research Center from 2009 data, found the wealth gap was the widest it has been since the government began publishing such statistics by ethnicity in 1984, when the white-black ratio was roughly 12:1.
The data analysis demonstrates that the economic recession, which plunged housing values and caused widespread unemployment, widened an existing racial wealth gap significantly.
In other findings:
About 35% of black households and 31% of Hispanic households had zero or negative net worth in 2009, compared with 15% of white households
The share of wealth held by the top 10% of American households increased from 49% in 2005 to 56% in 2009
About 24% of all Hispanic and black households in 2009 had no assets other than a vehicle, compared with 6% of white households, a situation little changed since 2005
“What’s pushing the wealth of whites is the rebound in the stock market and corporate savings, while younger Hispanics and African-Americans who bought homes in the last decade… are seeing big declines,” Timothy Smeeding, a University of Wisconsin-Madison professor who specialises in income inequality, told the Associated Press news agency.
Between 2005 and 2009, the median net worth of Hispanic households dropped by 66% and that of black households by 53%, according to the report.
That contrasted with the median net worth of white households, which dropped by just 16%.
Before the recession, housing equity accounted for about 66% of the net worth of Hispanics and some 59% of black families. About 44% of the wealth of white families consisted of housing equity.
A geographic analysis of the study suggests a disproportionate share of Hispanics live in California, Nevada and Arizona, states which have experienced some of the steepest declines in US housing values.
Hispanics and blacks are the two largest minority groups in the US, making up 16% and 12% of the population respectively.
The figures reported in the Pew study are based on the Census Bureau’s Survey of Income and Program Participation, which surveyed 36,000 households on wealth from September to December 2009.
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